Market Update - 10th February 2024
Written by Brad Laird
The Reserve Bank of Australia has maintained the cash rate at 4.35% amidst high but decreasing inflation, now at 4.1%. Despite global and domestic challenges, service inflation remains a concern.
RBA Governor Michele Bullock highlighted the unique "Taylor Swift inflation" effect, noting the significant spending adjustments among consumers, due to high demand for Swift's concerts and related expenses. Swift's Eras Tour, making history with over $1 billion in gross earnings has been debated for its temporary inflationary impact in various countries. Bullock downplayed the policy impact but acknowledged the indirect influence of such events on services price inflation, through adjustments in consumer spending priorities.
The RBA aims to balance economic demand and supply, with further rate adjustments possible depending on evolving economic data and risks, emphasising the priority of returning inflation to the 2–3% target by 2025.
Over in the US the leading stock indexes experienced a downturn on Wednesday after concerns that the fed may not cut rates as much as expected, but they recovered to close higher on Thursday and Friday. The S&P 500, Dow Jones Industrial Average, and NASDAQ each increased by over 1% in total; for the S&P 500, this marked its 13th week of gains in the last 14 weeks.
